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Which Retirement Benefits can be subtracted on the Wisconsin return?

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Question
Which Retirement Benefits can be subtracted on the Wisconsin return?

Answer

Local and State Retirement Benefits

You may subtract any payments received from the retirement systems listed on page 16 provided:


(1) You were retired from the system before January 1, 1964, or
(2) You were a member of the system as of December 31, 1963, retiring at a later date and payments you receive are from an account established before 1964, or
(3) You are receiving payments from the system as the beneficiary of an individual who met either condition 1 or 2.
Your subtraction cannot be more than the amount of such payments that you included in your federal income.

The specific retirement systems are:


Milwaukee City Employees, Milwaukee City Police Officers, Milwaukee Fire Fighters, Milwaukee Public School Teachers, Milwaukee County Employees, Milwaukee Sheriff, and Wisconsin State Teachers retirement systems.

Note Do not subtract any of the following:

  • Payments received as a result of voluntary tax-sheltered annuity deposits in any of the retirement systems listed above.
  • Payments received from one of the retirement systems listed above if you first became a member after December 31, 1963. This applies even though pre-1964 military service may have been counted as creditable service in computing your retirement benefit.

CAUTION Your retirement benefits may be subtracted only if they are based on qualified membership in one of the retirement systems listed above. Qualified membership is membership that began before January 1964 as explained on page 15. Any portion of your retirement benefit that is based on membership in other retirement systems (or based on employment that began after December 31, 1963) is taxable and may not be subtracted.
Example 1 You were a member of the Wisconsin State Teachers Retirement System as of December 31, 1963. You left teaching after 1963 and withdrew the allowable amount from your retirement account. This closed the account. You later returned to teaching. A new retirement account was then established for you. Retirement benefits from this new account (established after 1963) do not qualify for the exemption.
Example 2 You were employed as a teacher from 1960‑65. During that time you were a member of the Wisconsin State Teachers Retirement System. From 1966 until retirement, you were employed by a state agency (not as a teacher). You were then a member of the Wisconsin Retirement System. You receive an annuity from the Department of Employee Trust Funds. The annuity is based on employment in both retirement systems. Only the portion of the annuity that is due to the Wisconsin State Teachers Retirement System may be subtracted. You may use the following formula to figure the exempt amount that may be subtracted: Years of Annuity Portion of creditable service included annuity which in an exempt plan x in federal = may be Total years of income subtracted creditable service


Note You may have received separate Forms 1099-R for the taxable and exempt portions of your annuity. In this case, you may use the Fo

Federal Retirement Benefits

You may subtract payments received from a federal retirement system provided:
(1) You were retired from the system before January 1, 1964, or
(2) You were a member of the system as of December 31, 1963, retiring at a later date and payments you receive are from an account established before 1964, or
(3) You are receiving payments from the system as the beneficiary of an individual who met either condition 1 or 2.
See “05 Local and State Retirement Benefits” on page 15 for further information. The limitations and examples that apply to local and state retirement benefits also apply to federal retirement benefits.


A “federal retirement system” is a United States government civilian employee retirement system. Examples of such retirement systems include the Civil Service Retirement System and the Federal Employees’ Retirement System. Payments from the federal Thrift Savings Plan do not qualify for the subtraction.

 Railroad Retirement Benefits, Railroad Unemployment Insurance, and Sickness Benefits

Wisconsin does not tax amounts received from the U.S. Railroad Retirement Board. You may subtract railroad retirement benefits included on line 16b of your federal Form 1040 (line 12b of Form 1040A).


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Article Details
Views: 785 Created on: Jun 15, 2013
Date updated: Aug 25, 2015
Posted in: STATES, Wisconsin

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